The entry of hard seltzers into the alcoholic beverages market has been an industry disrupter. The industry was worth 4.4 billion dollars in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 16.2% from 2020 to 2027, according to Grand View Research. Since the advent of the industry-dominant White Claw®, many additional players have entered the market, and innovation in this competitive space is crucial for companies to stand out and make their mark. If your company invests in research and development (R&D) in the hard seltzer industry, some of your costs can be offset by claiming the R&D Tax Credit.
Employee wages, raw materials and supplies, and third-party contractor costs associated with research and development activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your company or firm operates.
Example activities that qualify:
- Testing new additives or flavor combinations to achieve desired flavor/aroma profiles
- Implementing automation or robotics to increase production efficiency and quality
- Developing new fermentation or manufacturing processes
- Determining optimal methods to scale-up production procedures
- Testing new packaging or canning approaches to improve taste and/or shelf life
- Creating novel software or mobile applications to track inventory and sales
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Brew Masters / Brewers
- Process Engineers
- Product Managers
- QA / QC Personnel
- Software Developers